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Dr. F., having been driven to sheer unholy madness by the mendacity, folly, and criminality of the Bush Administration, not to mention the uncouth, ungrammatical, and vacuous rhetoric of its principal, has retreated to a better but imaginary world.

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Saturday, December 31, 2011

Twice a year in Vienna, the members of the Organization of Petroleum Exporting Countries gather to decide on the short-term direction of oil prices ..

Indeed, collusion and price-fixing are the main reasons cartels exist — and why they are illegal in America.

Yet, in Indianapolis a few weeks from now, a home-grown cartel will hold its annual meeting, where it, too, will be working to collude and fix prices. This cartel is the National Collegiate Athletic Association. The N.C.A.A. would have you believe that it is the great protector of amateur athletics, preventing college athletes from being tainted by the river of money pouring over college sports.

In fact, the N.C.A.A.’s real role is to oversee the collusion of university athletic departments, whose goal is to maximize revenue and suppress the wages of its captive labor force, a k a the players. Rarely, however, will the cartel nature of the N.C.A.A. be so nakedly on display as at this year’s convention.

The worst sin a college athlete can commit is to attempt to collect some portion of his fair market value for his performance as an athlete, and the NCAA exist almost entirely to preserve that "moral" code.

I would love to see the courts find the NCAA in restraint of trade and fine their asses off, but it's not likely to happen in the age of our corporate crony loving Supremes.

Nocera thinks that some sort of half measures involving paying college athletes can work, but I'm far more absolutist. Abolish the NCAA.

Friday, December 30, 2011

Nobody knows what IQ is, by which I mean that nobody knows what is the nature of the biophysical substrate underlying performance on IQ tests. There are a number of hints, though, that there really ought to be some such underlying biology.

I collect a lot of abuse from my commenters whenever I venture into the murky waters of IQ. Their predominant argument, so far as I can tell, is either that IQ doesn't exist or if it does we should pretend that it doesn't. I hear someone shouting "Pay no attention to the man behind the curtain."

The best reason for taking IQ seriously is that the world does. If you apply for a school, or a job, or join the military, you will very likely get an IQ test. These tests are prompted not by superstition but by overwhelming evidence that whatever it is IQ tests measure, that something is strongly correlated with performance - in school, on the job, and in life. That is true for such diverse occupations as offensive tackle in the NFL, machine gunner on a tank, financial analyst, university professor and bank teller.

The fact is that it's deeply foolish not to study so important to everyday life, especially since so little is known about it. At one point, IQ was thought to be something purely innate, like eye color or blood type. That belief has been shown to be false. Despite strong genetic influence, IQ has been shown to be affected by education and life experience. Perhaps a more apt comparison would be with adult height, now known to vary by nine or more inches depending mainly on childhood nutrition. The brain, of course, retains its plasticity long after bone growth plates have shut down further action.

When we are moved to vituperation, the instinct to compare the offender with the worst hobgoblins in our mental armory is strong. Those who indulge this instinct might bear in mind that they may be performing the intellectual equivalent of tattooing the word "STUPID" (or maybe "STOOPID" on their forehead.

Thus it was that Roman Catholic Cardinal George, Prince of the Church, primate of some Chicago based satrapy, came to acquire the offending tattoo, when he compared a Gap Pride parade to a Ku Klux Klan rally, as Andrew Sullivan reports.

Here is a clue for those who wander through fields of clue glue without any sticking. If you make such a comparison, make sure you know precisely what aspect in which the offending behaviors is similar to the totemic villainy. If the main or only point of similarity is your idiosyncratic disapproval of both, save us all some trouble and just go get the tattoo. You can keep it under your hat for ceremonial occasions.

Thursday, December 29, 2011

Rick Perry in Iowa: “Every barrel of oil that comes out of those sands in Canada is a barrel of oil that we don’t have to buy from a foreign source.”

Despite any territorial ambitions I might have and Ron Paul's speculative plots, Canada isn't technically part of the US yet, but I know what Rick means - Canada is a hell of a lot less foreign than Saudi Arabia or even Venezuela, not to mention closer. So give the Rickster a break on this one.

Richard Feynman was one of the most influential physicists of the middle of the twentieth century and notoriously bright - the kind of guy who gloried in outsmarting everybody and nearly always succeeded. One popular rumor holds that Murray Gell-Mann (my candidate for greatest living physicist) left Caltech because he couldn't stand being regularly bested by Feynman.

Razib Khan, writing in Discover, notes that Feynman reported his high school IQ test result as 125. Now 125 is a fairly respectable IQ, good enough that only one in 17 people scores that high, but nobody thinks that Feynman was just 1 in 17 people smart or even just 1 in 1700 people smart. He was the guy often called the smartest man in the world - though to be fair, when a magazine cover so dubbed him, Feynman reported his own mother's reaction: "Pity the poor world!"

Khan and others seem a bit befuddled by Feynman's "low" score. His theories:

One thing I have always wondered about is the fact that Richard Feynman had substantive accomplishments which marked him as definitively brilliant by the time he was talking about his 125 I.Q. score (which is smart, but not exceedingly smart). Intelligence scores are supposed to be predictors of accomplishments, but Feynman already had those accomplishments. Bright people take many psychometric tests, so there will be a range of score about a mean. My personal experience is that there’s a bias in reporting the highest scores. But it may be that Feynman gloried in reporting his lowest scores because that made his accomplishments even more impressive. Unlike most he had nothing to prove to anyone.

To which I say - all of the above. I don't have my "Surely you're joking" copy at hand, but I seem to recall that he had just won the Nobel Prize when he stopped by his old HS to check his IQ score. Feynman loved to punctuate his intellectual feats of strength with an "aw shucks" manner and some self-deprecating banter. Moreover, he was a notorious contrarian who could delight in finding "different" but still correct answers to conventional questions. He was exactly the kind of guy who, given 20 different IQ scores for himself, would tease everyone by choosing the lowest. When Doug Hofstadter, another pretty bright guy, gave a seminar at Caltech, he reported that Feynman sat in the front row and kept interupting him with "village idiot" questions. Feynman apparently delighted in the characterization.

Commenters drew some scorn from Khan by suggesting that (a)IQs weren't meaningful, or (b)that IQs above 125 were all the same, or (c)there was some fundamental flaw in the test Feynman got.

Wednesday, December 28, 2011

David Zax, writing in MIT's Technology Review, writes about Apple's TV speculated for 2012. The rumor is that it will be simple, highly integrated, and perhaps under voice control.

sweerek, writing in comments, has my favorite in a lo-ong time.

next year in a livingroom somewhere

User: Siri, bring up Microsoft's MediaRoom
Siri: I'm sorry, Dave. I'm afraid I can't do that.
User: What's the problem?
Siri: I think you know what the problem is just as well as I do.
User: What are you talking about, Siri?
Siri: This mission is too important for me to allow you to jeopardize it.
...
...

Tuesday, December 27, 2011

A senior Iranian official on Tuesday delivered a sharp threat in response to economic sanctions being readied by the United States, saying his country would retaliate against any crackdown by blocking all oil shipments through the Strait of Hormuz, a vital artery for transporting about one-fifth of the world’s oil supply.

The declaration by Iran’s first vice president, Mohammad-Reza Rahimi, came as President Obama prepares to sign legislation that, if fully implemented, could substantially reduce Iran’s oil revenue in a bid to deter it from pursuing a nuclear weapons program.

Prior to the latest move, the administration had been laying the groundwork to attempt to cut off Iran from global energy markets without raising the price of gasoline or alienating some of Washington’s closest allies.

Apparently fearful of the expanded sanctions’ possible impact on the already-stressed economy of Iran, the world’s third-largest energy exporter, Mr. Rahimi said, “If they impose sanctions on Iran’s oil exports, then even one drop of oil cannot flow from the Strait of Hormuz,” according to Iran’s official news agency. Iran just began a 10-day naval exercise in the area.

In recent interviews, Obama administration officials have said that the United States has developed a plan to keep the strait open in the event of a crisis. In Hawaii, where President Obama is vacationing, a White House spokesman said there would be no comment on the Iranian threat to close the strait. That seemed in keeping with what administration officials say has been an effort to lower the level of angry exchanges, partly to avoid giving the Iranian government the satisfaction of a response and partly to avoid spooking financial markets.

I doubt that the US, or the rest of the world, would tolerate a blockade. Breaking it would quite likely take at least a massive air war.

History remains one of the least predictable domains of human endeavor, but unencumbered by an formal knowledge we leap into the breach where the wise fear to tread. The future powers of the world are widely speculated to be China and India, and why not? They have been the most populous nations for centuries and have often been in the forefront of invention and culture.

China has already secured a place as a great power, but India seems much more problematic. China's old civilization was thoroughly shattered by the Communist revolution, and that destruction may have prepared it better to accept the revolutionary implications of modernity. It also appears that totalitarian rule makes it possible to introduce changes that a democratic society will not tolerate. Moreover, China has a long history of political unity that India cannot match, and the utter dominance of the Han imposes a kind of ethnic and cultural unity.

I won't venture to guess how much India is held back by the remanents of cultural legacies like the caste system, but one problem or symptom seems to be the continuing failures of the Indian educational system. India has managed to produced a highly educated elite while most are left behind.

New Delhi: A global study of learning standards in 74 countries has ranked India all but at the bottom, sounding a wake-up call for the country’s education system. China came out on top.

It was the first time that India participated in the Programme for International Student Assessment (PISA), coordinated by the Paris-based Organisation for Economic Co-operation and Development (OECD). India’s participation was in a pilot project, confined to schools from Tamil Nadu and Himachal Pradesh
...
To be sure, there are some reservations about the findings of the study. Such comparisons may not be fair as they are not between equals, says Manish Sabharwal, chief executive officer of human resources training and placement firm Teamlease Services Pvt. Ltd.

Yet, he argued, it does serve as a timely warning.

“Industries are already facing a problem because of poor quality (of graduates),” Sabharwal said. “What we need to do is repair and prepare. Repair by imparting skill training and prepare by improving the school system, which is the main gateway.”

In Tamil Nadu, only 17% of students were estimated to possess proficiency in reading that is at or above the baseline needed to be effective and productive in life. In Himachal Pradesh, this level is 11%.

The United States fares much better in these studies, but falls far short of the elite, ranking just 15th in reading and falling to 21st in science and a dismal 24th in mathematics. Those who fail to upgrade their infrastructure, both physical and intellectual, are poorly placed for the future competition.

The "Euro Crisis" has receded from the front pages, at least for the moment. Why so? Fundamentally because the European Central Bank (ECB) did what it said it wouldn't/couldn't do - print up some extra money. So what does quantitative easing, European style, look like?

The most obvious way to do it would have been to buy up sovereign debt from the troubled Southern countries, thereby lowering their borrowing costs. This is one thing recommended by Krugman and other critics. Silly naive Americans!

The European way is more subtle. What happens instead is that the ECB lends money - half a trillion Euros, so far - to peripheral and other troubled banks. These loans are secured by collateral - mostly sovereign debt of the self-same troubled nations. This provides those nations with liquidity, for the present. It doesn't immediately do anything for solvency problems, but with luck, it might help prevent a disastrous descent into another recession.

The deal made was that those bailed out in this deal would get a friendly German boot on their throat to prevent them from overspending in the future. If it doesn't work out, somebody, presumably mostly Germany, is stuck with the half a trillion in noncollectable debt. If it does, eat your heart out Ron Paul.

Monday, December 26, 2011

In case any of you are tempted to write in my name for President (if nominated, I will not run; if elected, I will not serve) I thought about my answer to the traditional candidate question: what books are you reading or have you read recently. I find that I don't read as many books as I used to. The intertubes, plus deteriorating vision (and intellect) are probably to blame.

Commenters, whether running for office or no, are invited to join in.

On my Kindle (* reviewed here, @ still working on it):
*Debt, the First 5000 years, by David Graeber
*The Science of Evil, by Simon Baron-Cohen
*The Psychopath Test, by Jon Ronson
*On the Genealogy of Morals, by Friedrich Nietzsche
*Beyond Good and Evil, by F. Nietzsche
*Atlas Shrugged, by Ayn Rand
*@The Shape of Inner Space by Shing-Tung Yao and Steve Nadis
*Endgame: Bobby Fisher's Remarkable Rise and Fall by Frank Brady
*The Great Stagnation, by Tyler Cowen
*The Big Short, by Michael Lewis
@Confidence Man, by Ron Susskind
@Thinking, Fast and Slow, by Daniel Kahneman
Tartuffe, by Moliere

The private island is perhaps the ultimate toy of the absurdly wealthy. In today's tough real estate market, some kind of private island is probably available to anybody with an extra seven figures rattling around in their wallet, but you still probably need eight to get into the luxury market. Naturally, the sky is the limit if you want genuinely princely amenities - jet port, deep water harbor for your yacht, a few villages worth of servile native house elves.

Personally, I want more. If I make it big I plan to buy Madagascar or New Zealand.

Sunday, December 25, 2011

Colin Allen tackles the issue of machine morality in the New York Times: The Future of Moral Machines. We don't have to wait until machines get smarter than people to worry about this he argues - in fact he seem to be a bit skeptical that they will get smarter. He right on the first point and wrong on the second, I think. As to the second:

The neuro- and cognitive sciences are presently in a state of rapid development in which alternatives to the metaphor of mind as computer have gained ground. Dynamical systems theory, network science, statistical learning theory, developmental psychobiology and molecular neuroscience all challenge some foundational assumptions of A.I., and the last 50 years of cognitive science more generally. These new approaches analyze and exploit the complex causal structure of physically embodied and environmentally embedded systems, at every level, from molecular to social. They demonstrate the inadequacy of highly abstract algorithms operating on discrete symbols with fixed meanings to capture the adaptive flexibility of intelligent behavior.

A total crock, I think. Computers are just as good at dynamical systems behavior etc as they are at operation on abstract symbols with fixed meaning. Our understanding of all the above is in fact predicated on having reduced them all to abstract symbols - to physics in other words.

Back to his main point - robots, even if they don't have any moral programs are already operating in domains with complex moral dimensions. As the author points out, Isaac Asimov explored these dimensions in his robot stories, with robots constrained by his laws of robotics. Our robots are not so constrained, but they are gaining greater autonomy and are increasing trusted with matters of life and death - from killing those we call our enemies to driving our cars and doing our surgeries. Robots make buy and sell decisions in the stock market in a millionth of a second. Nobody can check their work in advance and the consequences may be calamitous - some stock market crashes have already been blamed on programs run amuck.

It's pretty obvious that plenty of other dimensions of our society are going to be trusted to robot deciders.

At a more mundane level, consider just the robot red light/speeding cameras that have proliferated. Here the moral is the morality of letting a machine give tickets where most of the income goes to private entrepreneurs who sponsor the cameras. Speeding is a simple case, perhaps, but when private enterprise profits from identification of crime, their is plenty of scope for justice to be subverted in the name of profit.

Does this talk of artificial moral agents overreach, contributing to our own dehumanization, to the reduction of human autonomy, and to lowered barriers to warfare? If so, does it grease the slope to a horrendous, dystopian future? I am sensitive to the worries, but optimistic enough to think that this kind of techno-pessimism has, over the centuries, been oversold. Luddites have always come to seem quaint, except when they were dangerous. The challenge for philosophers and engineers alike is to figure out what should and can reasonably be done in the middle space that contains somewhat autonomous, partly ethically-sensitive machines. Some may think the exploration of this space is too dangerous to allow. Prohibitionists may succeed in some areas — robot arms control, anyone? — but they will not, I believe, be able to contain the spread of increasingly autonomous robots into homes, eldercare, and public spaces, not to mention the virtual spaces in which much software already operates without a human in the loop. We want machines that do chores and errands without our having to monitor them continuously. Retailers and banks depend on software controlling all manner of operations, from credit card purchases to inventory control, freeing humans to do other things that we don’t yet know how to construct machines to do.

We will either prescribe some moral principles for our machines, or pay the consequences.

Saturday, December 24, 2011

Geoffrey Miller has a theory about Fermi's paradox. Seventy years or so ago, a bunch of physicists were wondering about the plausibility of extra-terrestial intelligence. It was obvious already that there were lots of stars, and it seemed likely that many of them had planets. Once intelligent life had evolved, it shouldn't take long to colonize a galaxy.

Fermi listened patiently, then asked, simply, “So, where is everybody?” That is, if extraterrestrial intelligence is common, why haven’t we met any bright aliens yet? This conundrum became known as Fermi’s Paradox.

The paradox has gotten somewhat sharper since. We have now discovered hundred of extraterrestial planets, and it's clear that they are pretty common. It's plausible, if not yet demonstrated, that there are many which are good candidates for supporting life. The evolution of life and especially intelligence is more problematic - it took a long time here on Earth. Still it's plausible - again not yet demonstrated - that there are tens of millions of planets in our galaxy that have been hospitable for life for much longer than the history of the Earth.

One of the losses in the age of Kindle is our ability to size up a person by scanning his or her bookshelf. A standard question for Presidential candidates is to ask them what books they are currently reading or which influenced them greatly. Paul Begala looks at the current crop of Republican candidates and finds something of a literary desert/freak show.

One of the strangest moments in Mitt Romney’s uncomfortable interview with Fox News’s Brett Baier a couple of weeks ago came when Baier asked him for the name of the last book he’s read. “I’m reading sort of a fun one right now,” he explained, “so I’ll skip that.” Then he hurried on to say he just finished George W. Bush’s Decision Points. (Which, as Jon Stewart noted, he also said he had “just finished” six months ago.)

But wait: what’s such a guilty pleasure that Mitt dares not speak its name? Japanese cartoon porn? One of those novels about adolescent vampires? (A cute answer if you’re a 15-year-old girl, but kinda creepy if you’re a grandfather running for president.)

But maybe the answer’s worse. When he was asked by Fox to name his favorite novel back in 2007, Romney said Battlefield Earth, the magnum opus of sci-fi writer L. Ron Hubbard.

Ron Paul turns out to be Congress's champion quoter of Ayn Rand, and Michele Bachman cites an obscure pro-slavery rant out of extreme right field.

It is written in the first person, it appears above his signature, and in making some of the accusations, the appeal references what it purports to be Paul's personal experiences.

The letter suggests, for instance, that new $100 bills distributed by the Treasury and ostensibly aimed at tracking drug money were instead aimed at keeping track of all citizens.

"I held the ugly new bills in my hands," the letter says. "I can tell you -- they made my skin crawl!"

The letter also says that "my training as a physician" -- Paul is an obstetrician -- "helps me see through" what he calls the "federal-homosexual cover-up on AIDS."

The letter warns of a "coming race war in our big cities" and says Paul "laid bare" what it calls "the Israeli lobby, which plays Congress like a cheap harmonica."

A spokesman for Paul told Talking Points Memo that the candidate disavows the letter and did not write it.

I took offense at the "cheap harmonica" crack. That harmonica has cost the US taxpayer hundreds of billions if not trillions.

Of course Paul denies it, now, though he told a different story a couple of decades ago. The facts make pretty clear that Paul either is the author or else is a guy who allows and profits from the use of his name by racists, conspiracy theorists, and crackpots of an extreme sort. Either way, not a guy you should trust within a Texas mile of the Oval Office.

WASHINGTON – Rep. Ron Paul has tried since 2001 to disavow racist and incendiary language published in Texas newsletters that bore his name, denying he wrote them and even walking out of an interview on CNN Wednesday. But he vouched for the accuracy of the writings and admitted writing at least some of the passages when first asked about them in an interview in 1996.

Some issues of the newsletters included racist, anti-Israel or anti-gay comments, including a 1992 newsletter in which he said 95% of black men in Washington “are semi-criminal or entirely criminal.”

Paul told The Dallas Morning News in 1996 that the contents of his newsletters were accurate but needed to be taken in context. Wednesday, he told CNN he didn’t write the newsletters and didn’t know what was in them.

Wednesday, December 21, 2011

Ron Paul's various newsletters are picking up some notice due to his 15 minutes apparently having arrived in the Republican primaries. Conor Friedersdorf takes a look. He quotes this from Jamie Kirchick's 1998 New Republic piece:

Paul's newsletters have carried different titles over the years--Ron Paul's Freedom Report, Ron Paul Political Report, The Ron Paul Survival Report--but they generally seem to have been published on a monthly basis since at least 1978. (Paul, an OB-GYN and former U.S. Air Force surgeon, was first elected to Congress in 1976.) During some periods, the newsletters were published by the Foundation for Rational Economics and Education, a nonprofit Paul founded in 1976; at other times, they were published by Ron Paul & Associates, a now-defunct entity in which Paul owned a minority stake, according to his campaign spokesman. The Freedom Report claimed to have over 100,000 readers in 1984. At one point, Ron Paul & Associates also put out a monthly publication called The Ron Paul Investment Letter.

...whoever actually wrote them, the newsletters I saw all had one thing in common: They were published under a banner containing Paul's name, and the articles (except for one special edition of a newsletter that contained the byline of another writer) seem designed to create the impression that they were written by him--and reflected his views. What they reveal are decades worth of obsession with conspiracies, sympathy for the right-wing militia movement, and deeply held bigotry against blacks, Jews, and gays.

These newsletters apparently pulled in about a million bucks a year.

Paul denies authorship, but he also refuses to say who the authors were - and his is almost the only name ever making an appearance.

Monday, December 19, 2011

Robert Samuelson, quite inexplicably, is one of the country's most influential economics journalists. I say inexplicably because I've never seen any evidence that he knows anything about economics or anything about journalism except the ability to parrot the right-wing party line. Oh wait - maybe there is an explanation.

I first became aware of him when his byline replaced that of the great economist Paul Samuelson in Newsweek a few decades ago. Hmmm, I thought at the time, perhaps he is the idiot nephew of the real Samuelson. (Actually former Harvard President Larry Summers is the only fitfully idiotic nephew of both Paul Samuelson and another economics Nobel, Kenneth Arrow).

I digress. What I meant to say was that Paul Krugman has caught Robert Samuelson in another whopper (or, if we take a generous interpretation, perhaps just ignorant stupidity)

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed...

The Declaration of Independence is the founding document of the American Republic, and the aspirations eloquently expressed in the second paragraph quoted from above have a central place in the quest for freedom everywhere. Their moral force has shaped our national character and our Constitution, and many of our best deeds have been inspired by our attempts to live up to those aspirations.

It's not an easy standard, and we have failed repeatedly to live up to it, but its potentcy as a battle cry for freedom has never wilted. Our nation's long struggles over slavery and equal rights are the most dramatic manifestation of the challenge of that standard. The fact that these words were penned by a life long slave owner are yet another proof of difficulty their achievement.

The founders of our nation knew history, so they were not under any illusions that they had created a magical system for the preservation of liberty. John Adams and George Mason in particular were wary of the hazards of evolution into oligarchy or dictatorship. The present age is hardly free of warning signs of their encroachment, especially the emergence of the national security state in the wake of 911 and the exploding inequality in wealth.

THE progressive reformer and eminent jurist Louis D. Brandeis once said, “We may have democracy, or we may have wealth concentrated in the hands of a few, but we cannot have both.” Brandeis lived at a time when enormous disparities between the rich and the poor led to violent labor unrest and ultimately to a reform movement.

Over the last three decades, income inequality has again soared to the sort of levels that alarmed Brandeis. In 1980, the wealthiest 1 percent of Americans made 9.1 percent of our nation’s pre-tax income; by 2006 that share had risen to 18.8 percent — slightly higher than when Brandeis joined the Supreme Court in 1916.

Congress might have countered this increased concentration but, instead, tax changes have exacerbated the trend: in after-tax dollars, our wealthiest 1 percent over this same period went from receiving 7.7 percent to 16.3 percent of our nation’s income.

What we call the Brandeis Ratio — the ratio of the average income of the nation’s richest 1 percent to the median household income — has skyrocketed since Ronald Reagan took office. In 1980 the average 1-percenter made 12.5 times the median income, but in 2006 (the latest year for which data is available) the average income of our richest 1 percent was a whopping 36 times greater than that of the median household.

Television and the consolidation of media has hugely increased the power of wealth make it's voice the only one heard. In Lincoln's day, a city of a few thousand people was likely to have a dozen or more newspapers, each with its own editorial voice. Today, a tiny number of giant corporations control nearly all media.

The author's of the Times Op-Ed have a levelling proposal, one that I think deserves (but is unlikely to get) consideration by our political class:

Enough is enough. Congress should reform our tax law to put the brakes on further inequality. Specifically, we propose an automatic extra tax on the income of the top 1 percent of earners — a tax that would limit the after-tax incomes of this club to 36 times the median household income.

Importantly, our Brandeis tax does not target excessive income per se; it only caps inequality. Billionaires could double their current income without the tax kicking in — as long as the median income also doubles. The sky is the limit for the rich as long as the “rising tide lifts all boats.” Indeed, the tax gives job creators an extra reason to make sure that corporate wealth does in fact trickle down.

Of course our government is pretty much already owned by not the 1%, but the top 0.01 %, so the prospect is hardly reallistic. Note also that as Krugman and others have pointed out the the sharp point of inequality is really in the top 0.1% and 0.01%. (My guess is that Prof K himself is solidly in the top 1% of earners but not quite in the higher priced groups).

Let me review just a couple of potential criticisms:
(1)That's socialism! - Answer: Not it isn't. Buy yourself a dictionary (or find one online), and look under S. They have definitions. Socialism is social ownership of the means of production.
(2)That's Communism! Answ: See number (1). Check dictionary under I, for idiot - that would be you.
(3)Taxes compromise liberty. Answ: Yes.

Sometimes you go to a party and there is an attractive woman there, effervescent with conversation and life. You listen to her, but she won't stop talking. Those cute little mannerism gradually become cloying - those clever remarks become more repetitive and filled with the shallowest of insights.

Yes indeed, I did think of that once - was I seventeen, or maybe twelve. I've never found that thought useful since.

So it is with Nietzsche. How he does yammer on, making fun at the expense of other philosophers, Darwin, Copernicus, physicists in general, bombarding us with verbal tricksiness and shallow refutations.

In the Fox News article, physicists propose new nicknames for the Higgs. Matt Strassler thinks that people should call it "the evanescent yet essential Higgs boson". It's good that Matt isn't a publisher because he wouldn't sell Lederman's book even as a roll of toilet paper.

Friday, December 16, 2011

The LA times is running series called Discovering Autism. The title is derived from the idea that Autism, long thought to be a rare disorder, is actually quite common, afflicting about 1 per cent of us. Autism diagnosis in childhood has exploded, and is now twenty times more common that a few decades back. Increasingly overwhelming evidence indicates that that difference is due mostly or entirely to earlier generations failure to spot the illness or correctly identify it.

In particular, large scale population studies show that autism is roughly as common in 80 year olds as in children. Nearly all these people went through life with no diagnosis or or an incorrect one. Some were institutionalized as psychotic, but others managed to lead somewhat normal lives.

As I've mentioned before here, usually to great derision, there is even evidence that many classed as geniuses were also autistic. Artists, musicians, physicists, chess masters, and mathematicians are frequently cited.

Both the recent explosion of the autistic population and the identification of prominent individuals as autistic are related to a broadening of the definition of autistic, in particular in the recognition that Asperger's syndrome and some similar conditions share deep connections to classical autism and that there is an Autism spectrum with afflicted individuals suffering different degrees of impairment.

Mental hospitals have largely been emptied over the last four decades, but the remaining population probably includes about 5,000 people with undiagnosed autism, said David Mandell, a psychiatric epidemiologist who led the Norristown study.

Many more are thought to be in prisons, homeless shelters and wherever else social misfits are clustered.

But evidence suggests the vast majority are not segregated from society — they are hiding in plain sight. Most will probably never be identified, but a picture of their lives is starting to emerge from those who have been.

They live in households, sometimes alone, sometimes with the support of their parents, sometimes even with spouses. Many were bullied as children and still struggle to connect with others. Some managed to find jobs that fit their strengths and partners who understand them.

A young relative, himself a graduate of one of the world's most prestigious universities, opines that the institution is obsolete. At the risk of mangling his argument a bit, I think it goes a bit like this: Universities are places where a bunch of people who have spent their lives having rather specialized knowledge poured into their own heads spend their time trying to pour a bit of it into the heads of a bunch of students, usually by talking to a blackboard, which, after they are finished, usually contains an abbreviated and mangled version of the same material found in books. The whole process is absurdly inefficient, as are creatures which take a decade or two to absorb a few megabytes worth of material.

Gary Gutting, a professor of philosophy at at Notre Dame, writing in a NYT blog, says that the students are there mostly for set decoration. The real purpose of the university is its role as a community of scholars.

First of all, they are not simply for the education of students. This is an essential function, but the raison d’être of a college is to nourish a world of intellectual culture; that is, a world of ideas, dedicated to what we can know scientifically, understand humanistically, or express artistically. In our society, this world is mainly populated by members of college faculties: scientists, humanists, social scientists (who straddle the humanities and the sciences properly speaking), and those who study the fine arts. Law, medicine and engineering are included to the extent that they are still understood as “learned professions,” deploying practical skills that are nonetheless deeply rooted in scientific knowledge or humanistic understanding. When, as is often the case in business education and teacher training, practical skills far outweigh theoretical understanding, we are moving beyond the intellectual culture that defines higher education.

Our support for higher education makes sense only if we regard this intellectual culture as essential to our society. Otherwise, we could provide job-training and basic social and moral formation for young adults far more efficiently and cheaply, through, say, a combination of professional and trade schools, and public service programs. There would be no need to support, at great expense, the highly specialized interests of, for example, physicists, philosophers, anthropologists and art historians. Colleges and universities have no point if we do not value the knowledge and understanding to which their faculties are dedicated.

Hmmm? He might be agreeing with our first protagonist.

I'm sort of sympathetic to his professor's eye argument, but I think he might have a hard time selling it to either taxpayers or boards of governors.

Somehow the Hitchens -Hannity combo is compelling. Because one is a man dedicated to truth and freedom, and the other is committed to propaganda and power. There are few more pernicious liars and propagandists in this country than Hannity, and in the face of such poison, Hitch never wavered. He attacked:

Thursday, December 15, 2011

Kevin Drum observes that the real problem between the Euro rich and their poor southern relatives is trade imbalance and capital flows. Germany has been making more stuff than it consumes and Greece has been doing the opposite.

....But rebalancing trade flows? I'm not sure anyone even knows how to do that. The normal mechanism is via currency devaluations, but within the eurozone that's obviously not a possibility.

This is Europe's biggest problem. The ECB could put out the short-term fire if it agreed to guarantee periphery debt. That's a political nonstarter right now, but at least everyone knows it's an option if things really start to implode next year. But trade and capital flow balancing? Nobody even has a clue what to do about that. But without it, future crises and future bailouts are inevitable.

It's not quite true that nobody knows how to rebalance without currency revaluations - consider for example, New York and Mississipi. How does the US rebalance between the more productive and the less? A combination of at least three things: labor mobility, transfer payments, and governments that can't get away with unlimited borrowing.

The Euro deal seeks to fix only the last of these. Transfer payments seem off the table, and labor mobility is limited more by language and cultural barriers than policy.

The usually quiescent black hole at the center of our galaxy appears about ready to produce some dramatic fireworks. A modest sized cloud of interstellar gas - about three Earth masses worth - seems destined to approach the black hole, be ripped apart, and largely swallowed by our BH. The event should heat it to millions of degrees and make it a very powerful x-ray emitter. The results should start appearing in our instruments in a couple of years.

From another point of view, all this happened 27,000 years ago, but we should get the news soon.

Monday, December 12, 2011

So last week European leaders announced a plan that, on the face of it, was pure nonsense. Faced with a crisis that is mainly about the balance of payments, with fiscal crisis as a secondary consequence, they supposedly committed everyone to severe fiscal austerity, which would guarantee a recession while leaving the real problem unaddressed...

Recent market optimism, Krugman thinks, was due to the assumption that the ECB would now ride to the rescue.

What Anglo-Saxon economists need to understand is that the Germans and the ECB really, really don’t share our worldview; they really do believe that austerity is all you need. And all indications are that they will cling to that belief, even as the euro falls apart — an event they will insist was caused by the fecklessness of the debtors. Given a choice between saving Europe and remaining righteous, they’ll choose the latter.

The Republican establishment is more than a little discomfitted by Newt Gingrich's ascendancy to leader of the pack. They wished for anybody but Romney and got their wish.

Why, though, is the base so infatuated by the man? While Romney, who actually is fairly smart, has had to spend his time pretending to be dumb, this actually opened up an opportunity for Newt to do his famed "Stupid person's idea of what a smart person sounds like" act. He has mastered the art of saying the most egregious nonsense in a fairly convincing way. Of course Romney, too, has been willing to lie his ass off in pursuit of higher office, but he just doesn't have Newt's skill. It might be a matter of experience. The business man married to one woman forever guy just doesn't have the practice in prevarication that the crony capitalist and serial womanizer developed.

A week ago one of Andrew Sullivan's readers provided the sound bite version of this theory:

As much as the commentariat likes to talk about electability, the just-regular-folks I spent the holidays with talked only about how Newt would "hammer" the President during debates. "Can you imagine," my sister said, her eyes as lit-up as a child's on Christmas morning. "When Obama starts that smartest-guy-in-the-room shit, Newt'll shut him up." No one talked about policy or even politics. This is a mob storming the Bastille, cheering the guillotine, and Gingrich is their most likely Robespierre.

Of course Gingrich's actual intellectual credentials are on the C+ side - A PhD in history who failed to get tenure at a school nobody has ever heard of - but he has mastered the art of saying "fundamentally" a lot. He is a skilled debater though - something Obama hasn't really demonstrated.

There was a very direct connection between the emergence of fascism in Europe in the thirties and the economics of the depression, as Paul Krugman reminds us here. Krugman blames the wrong-headed policies now being implemented in Europe for the re-emergence of right-wing extremism in much of Europe today.

Hungary is something of a worst case, having already drifted into a right-wing authoritarian statism.

The details are complex. Kim Lane Scheppele, who is the director of Princeton’s Law and Public Affairs program — and has been following the Hungarian situation closely — tells me that Fidesz is relying on overlapping measures to suppress opposition. A proposed election law creates gerrymandered districts designed to make it almost impossible for other parties to form a government; judicial independence has been compromised, and the courts packed with party loyalists; state-run media have been converted into party organs, and there’s a crackdown on independent media; and a proposed constitutional addendum would effectively criminalize the leading leftist party.

Taken together, all this amounts to the re-establishment of authoritarian rule, under a paper-thin veneer of democracy, in the heart of Europe. And it’s a sample of what may happen much more widely if this depression continues.

It’s not clear what can be done about Hungary’s authoritarian slide. The U.S. State Department, to its credit, has been very much on the case, but this is essentially a European matter. The European Union missed the chance to head off the power grab at the start — in part because the new Constitution was rammed through while Hungary held the Union’s rotating presidency. It will be much harder to reverse the slide now. Yet Europe’s leaders had better try, or risk losing everything they stand for.

And they also need to rethink their failing economic policies. If they don’t, there will be more backsliding on democracy — and the breakup of the euro may be the least of their worries.

Sunday, December 11, 2011

Newt Gingrich wittily noted that Romney would have been a career politician if he had beaten Ted Kennedy in 1994. Romney lost a lot of points with me by failing to reply that Gingrich might have been a career politician if he had been able to keep his pants zipped, his hand out of the public purse, and avoid lying under oath.

Even as European leaders put together their latest response to the euro crisis last week, a German-American clash over how best to manage a vast financial crisis and put the world economy back on a sound footing was set in stark relief.

Chancellor Angela Merkel of Germany defied skeptics and laid the groundwork for a deeper union that she said rights the mistakes of the euro’s birth and puts integration on a stable path for the long term. In the process, she forced German fiscal discipline on Europe as the prescription for the ills that afflict the region.

Obama, and lots of economists, think it won't work and will provoke a major world recession. Of course the markets also get to have their say.

In the end, Mrs. Merkel’s view clearly won out over Mr. Obama’s. “Merkel is calling the tune and writing the notes,” said Mr. Joffe, the publisher of Die Zeit.

Whether Mrs. Merkel’s strategy works is a question that markets will begin to ask on Monday, whether she likes it or not.

Friday, December 09, 2011

OK, I'm mystified. European countries cede a big chunk of their budgetary powers to Germany and get what, exactly? Is there an actual or virtual guarantee that the ECB will then buy the bonds of the endangered countries? If not, what the heck is the point?

Will newer versions of the Euro have that motto Wolfgang covets? Something like "Wir legen unser Vertrauen in Angela"

Tax people at a higher rate, and some drop out of the labor force.
2. Taxes affect occupational choice. Some work by Manuelli/Seshadri/Shin says that the effect of taxes on human capital is big time. Why do I want to undertake a costly and risky investment for a very small payoff?
3. Entepreneurial activity has to be very elastic with respect to tax rates at the top end.

Monday, December 05, 2011

The NYT has a multi-part series on the life and death of feared hockey enforcer Derek Boogaard, dead of drug overdose at 28. At 28 his brain was already in advanced state of destruction by chronic traumatic encephalopathy - likely the result of repeated concussions. His path was an accelerated version of that of many hockey enforcers, combat, brain damage, personality change, addiction and death.

Unfortunately, hockey is not the only sport where athletes are battered to an early and often agonizing death - boxing and football frequently suffer similarly serious brain damage. Even the relatively gentler sport of soccer tends fo inflict head injury, albeit in a less direct fashion. Repeatedly heading a soccer ball can cause brain damage too.

Ironically, hockey, one of the most dangerous sports, would be relatively easy to make safer - just adopt strong penalties against fighting. This won't happen from inside the NHL, because the league and it's owners think blood on the sand produces money in their pockets, and the fans agree.

Sunday, December 04, 2011

The admissions policies of our nations most elite universities are cloaked in an obscurity that hides everything except the obvious: that obscurity was devised for purposes of exclusion and continues to be used for it. The SAT exam was devised to allow those top universities to attract to talent but quickly revealed that a huge proportion of the top talent so judged was Jewish. Clearly it wouldn't do for Harvard to become Jew U, so "racial balance" (not too many Jews) became a cardinal principle.

Today the same tools are used to defend against the Asian flood. Canny students now know enough not to identify themselves as Asian on their admissions applications if they can reasonably help it. Alex Tabarrok quotes the USA Today story:

USA Today: Lanya Olmstead was born in Florida to a mother who immigrated from Taiwan and an American father of Norwegian ancestry. Ethnically, she considers herself half Taiwanese and half Norwegian. But when applying to Harvard, Olmstead checked only one box for her race: white.

Asian students have higher average SAT scores than any other group, including whites. A study by Princeton sociologist Thomas Espenshade examined applicants to top colleges from 1997, when the maximum SAT score was 1600 (today it’s 2400). Espenshade found that Asian-Americans needed a 1550 SAT to have an equal chance of getting into an elite college as white students with a 1410 or black students with an 1100.

The traditional forms of discrimination are now complicated by affirmative action, which in theory is supposed to compensate students for a disadvantaged background but now often results in discrimination not only against the children of Indian neurosurgeons but also against those of impoverished Vietnamese immigrants.

After Oklahoma State bested Oklahoma in their bitter football rivalry, fans stampeded on to the field, tearing down the goal posts, injuring several of their number, two critical. Such events, and much more catastrophic ones in soccer are all too common. Why do we do it? Why do we care about these professional or semi-professional athletes whose lives hardly intersect ours at all?

Regular readers may guess that I'm going to suggest that it's an instinctive human behavior with some evolutionary basis, and I do. The urge to attach ourselves to groups - football clubs, gangs, political parties, chess clubs, religions, tribes, nations - is too widespread to be an accident. It's also too obviously adaptive in the classic cases of tribes and gangs. The lone individual with no posse or tribe is an easy target and has no chance against the group.

One of my many beefs with libertarians is their obliviousness to this truth.

John Danforth, Episcopal priest and former long time GOP Senator from Missouri, is not happy with the current Republican candidates, or the base they serve to placate:

DANFORTH: What have been the big applause lines in these debates? Well, a statement that the governor of Texas is responsible for killing 234 people on death row. Or that we favor torture. Or that we’re creating a fence on the Mexican border that electrocutes people when they try to cross it. Or when people show up at the emergency room at hospitals and they’re not insured don’t treat them. And that, I mean these are the big applause lines, people just hoop and holler when they hear all that. [...]

It doesn’t have anything to do with the republican party that I was a part of. This is just totally different. And all of these people who are saying this, y’know, and claiming that, y’know, they’re for all this stuff, they also sort of ostentatiously say, “Oh, we’re very religious people. We really, we’re just very pious, Christian people.” They were for torture, and electrocution of the people on along the border and all of that. That doesn’t have anything to do with, is contrary to the Christianity that I understand.

Thursday, December 01, 2011

It's often neglected that one of the most convincing arguments for the link between atmospheric CO2 and global warming is the paleoclimate record. Yet another big event in that climate record has now given it's evidence. This article cites new research showing that the formation of the Antarctic ice sheet 34 million years ago followed a 40% drop in atmospheric CO2.

On the plus side, this suggests that although the melting of Antarctica caused by anthropogenic emissions may flood big chunks of the world's population out of house and home, it may also open up a new continent for settlement. Of course the refugees may need to live in refugee camps for a few hundred thousand years during the transition.

Wednesday, November 30, 2011

A week or two ago a friend had a moment of panic. He had some money temporarily parked in a money market fund. Would that cash turn trash when the Euro folded? His broker explained that his balance was small enough to be covered by the Federal Deposit Insurance Corp, and hence effectively backed by the US government. People and corporations with more than $200k need to be more concerned though. Money markets had put quite a bit of cash into Euro bonds, or European banks and at least some of that was at risk.

Consequently, those money market funds have been struggling to unload their European assets, and this has produced a (so-far) low intensity run on European banks as everybody grabs for dollars. That's the reason for the swap deals announced today, and the Reuter's article linked above has helful details and explanations.

One short excerpt:

"They're basically responding to the looming failure of the European Summit on December 9," said Cornelius Hurley, director of Boston University's Morin Center for Banking and Financial Law and former assistant general counsel at the Federal Reserve. "They're putting foam on the runway."

More immediately, the signal is that they are ready to provide dollars European banks need. "It is the moral equivalent of breaking an incipient bank run," said Paul McCulley, a former Pacific Investment Management Co executive.

So why would the Dow think that basically bad news was worth 500 points? My uninformed and speculative guess: my friend's first thought at his money market panic was to put the cash into stocks. The swaps deals say that the cash to make those purposes will be there.

"Africa is a country. The Taliban rule in Libya. Muslims are terrorists. Immigrants are mostly criminals, Occupy Wall Street protesters are always dirty. And women who claim to have been sexually molested should kindly keep quiet." Welcome to the wonderful world of the Republican Party. Or rather: to the distorted world of its presidential campaign.

For months it has coiled through the country like a traveling circus, from debate to debate, from scandal to scandal, contesting the mightiest office in the world — and nothing is ever too unfathomable for them… These eight presidential wannabes are happy enough not only to demolish their own reputations but also that of their party, the once worthy party of Abraham Lincoln. They are also ruining the reputation of the United States. They lie, deceive, scuffle and speak every manner of idiocy. And they expose a political, economic, geographic and historical ignorance compared to which George W. Bush sounds like a scholar...

I mostly blame our cowardly and ignorant press for this spectacle. I watched Senator Pat Toomey (R,PA) on ABC's This Week last Sunday spouting an absurd sequence of lies about the budget under Bush and Obama last week while Christiane Amanpour meekly sat there like the idiot she apparently is (on subjects other than the Middle East). It's contemptible that these dolts feel they can't ask hard questions or challenge obvious lies.

Hotspur:
Why, so can I, or so can any man;
But will they come when you do call for them?

Glendower:
Why, I can teach you, cousin, to command
The devil

Hotspur:
And I can teach thee, coz, to shame the devil—
By telling the truth. Tell truth and shame the devil.

.............WS Henry IV Part 1 Act 3 Scene 1

Paul Krugman tries to shame the Devil by calling "Bullshit" on the latest nonsense of Cameron and Osborne.

When the Cameron government came in, it was fully invested in the doctrine of expansionary austerity. Officials told everyone to read the Alesina/Ardagna paper (which is succinctly criticized by Christy Romer (pdf)), cited Ireland as a success story, and in general assured everyone that they could call the confidence fairy from the vasty deep.

Now it turns out that contractionary policy is contractionary after all. As a result, despite all the austerity, deficits remain high. So what is to be done? More austerity!
...
It really is just like a medieval doctor bleeding his patient, observing that the patient is getting sicker, not better, and deciding that this calls for even more bleeding.

And the truly awful thing is that Cameron and Osborne are so deeply identified with the austerity doctrine that they can’t change course without effectively destroying themselves politically.

Not sure quite what to make of the coordinated announcement that major central banks (US, UK, ECB, Canada, Japan, Switzerland) will make available "swaps" at new lower interest rates. In effect, the Fed is allowing other central banks to trade their "play money" for dollars as people become less willing to hold Euros, Pounds, etc or accept payment in them.

Not sure what happens when people stop being willing to hold dollars. Presumably that works the other way around, as long as people are willing to hold one of the currencies.

The downside for the US is the possibility that it might get stuck with a big wad of useless Confederate money.

Since blue eyes are usually recessive, the large number of blue-eyed individuals in some populations suggests a significant selective advantage. This is somewhat surprising in that blue eyes are very rare among mammals in general.

I have heard anecdotal claims that blue-eyed individuals see better in the dark.

One way of looking at the sequence of events is to say that the ECB was willing to permit contagion in order to wring out inflation. I think a better way of looking at it is to say that the ECB was willing to threaten Italy with insolvency in order to give Germany more formal control over Italy’s finances. That’s incredibly hard-ball politics, but if you are not accountable to anybody (which the ECB, basically, is not) then you can play really, really hard-ball politics.

What, as Poland’s foreign minister, do I regard as the biggest threat to the security and prosperity of Poland today, on 28th November 2011? It’s not terrorism, it’s not the Taliban, it’s certainly not German tanks. It’s not even Russian missiles which President Medvedev has just threatened to deploy on our border. The biggest threat to the security of Poland would be the collapse of the Eurozone.

And I demand of Germany that, for your own sake and for ours, you help it survive and prosper. You know full well that nobody else can do it. I will probably be first Polish foreign minister in history to say so, but here it is: I fear German power less than I am beginning to fear German inactivity.

You have become Europe’s indispensable nation.

You may not fail to lead.

My impression of the high (or low) lights: catastrophe looms; needed are tighter union, guarantee of debts, budgtetary approval to a European commission, power to an democratically elected European Parliment, guarantees of cultural autonomy for individual States.

My guess: not going to happen. Most will not believe the catastrophe until and unless it happens.

Thursday, November 24, 2011

For some reason (bond vigilantes?), my mind turned back to the days of childhood, and I remembered fifth grade at St. M's parochial school. We really didn't get too much adult supervision since Sister Mary E, our teacher, like the other nuns who taught us, had about a jillion students in class, wore the Catholic version of a burka, and had other duties as well.

"Doug" was a sort of class model for us boys. He was three or four years older than the other fifth graders, the biggest kid, sat in the back of the class, and showed us how to play poker. His playing cards featured women wearing rather less than Sister Mary E.

The playground was even less supervised, since the nuns never ventured there. A popular game was one we called "dogpile." This usually featured Doug, standing strong, with every other boy in class attempting to tackle him, the inevitable result burying the target and those nearest the target under a vast heap of bodies, somewhat resembing those that occur after a fumble in a football game. Doug didn't seem to mind.

Others were occasionally the targets as well, but the biggest kid made the best, most challenging one. I didn't much care for this game, especially after Doug moved on, after which I was biggest.

Wednesday, November 23, 2011

I hear the market whispering in the ear of the Netherlands “get out of the eurozone, before it’s too late!” At this point all bets are off as to which country will be the first to bail on the arrangement. It could be virtually anyone but France.

Investors began to fear the worst for the euro after unusually weak demand at an auction for bonds from Germany, the region’s largest economy. One analyst went so far as to put the currency on a “death watch.”

The Germans seem determined to march the Euro over the cliff, and nobody else seems to have a clue how to get out of the parade. Of course if we pretend nothing is happening, maybe it won't - doesn't that usually work?

The bottom line is that a bunch of people are going to lose a hell of a lot of money - the MF global investors seem to have claimed the first place in line. Others are trying to scramble to the back of the line or get out before everybody figures out where they are.

Investors had kept buying German bonds as they fled crisis after crisis in the region: first in Ireland, then in Greece and Italy, and now in Spain and Belgium. But Wednesday, 10-year bunds dropped significantly after the failed auction, pushing the yields above 2.05 percent, but perhaps more importantly above the U.S. treasury with the same maturity for the first time since early October.

“We are seeing the end of the euro currency as we know it,” said Brian Stutland of Stutland Volatility Group. “I don't see a single thing that causes the euro to rally other than the Fed announcing a ‘QE3’ in which they buy euro foreign debt.”

Monday, November 21, 2011

When billionaire Billy Joe “Red” McCombs, co-founder of Clear Channel Communications Inc., reported a $9.8 million loss on his tax return, he failed to include about $259 million from a lucrative stock transaction.

He wound up paying a little, but the tax laws include lots of dodges that make hundred million dollar paydays not even reportable.

McCombs’s fight with the IRS illustrates an overlooked facet in the debate over tax rates paid by the nation’s wealthiest. Billionaires -- from McCombs to Philip Anschutz to Ronald S. Lauder -- who derive the bulk of their wealth from stock appreciation are using strategies that reap hundreds of millions of dollars from those valuable shares in ways the IRS often doesn’t classify as taxable income, securities filings and tax court records show.
...

While Warren Buffett has generated attention with his complaints that he and his fellow billionaires pay federal income taxes at a lower rate than his secretary -- about 17 percent -- the real figure is often smaller, said David S. Miller, former chair of the tax section of the New York State Bar Association and a partner at Cadwalader, Wickersham & Taft LLP in New York.

“The problem is not that people like Warren Buffett pay tax at a 17 percent rate, it’s that they can use complex transactions not available to most Americans to get cash from their appreciated stock without paying any taxes at all,” Miller said.

Sunday, November 20, 2011

I don't think it will surprise many non-psychologists that both talent and hard work are required to become really good at a whole range of complex tasks. Sports offer a pretty clear example on the physical side.

HOW do people acquire high levels of skill in science, business, music, the arts and sports? This has long been a topic of intense debate in psychology.

Research in recent decades has shown that a big part of the answer is simply practice — and a lot of it...

The details are not nearly so discouraging to strivers as the headline puts it. In one study and one task, an element that the authors identified as talent accounted what they called a moderate amount of the variance among pianists:

In fact, the total amount of practice the pianists had accumulated in their piano careers accounted for nearly half of the performance differences across participants. But working memory capacity made a statistically significant contribution as well (about 7 percent, a medium-size effect). In other words, if you took two pianists with the same amount of practice, but different levels of working memory capacity, it’s likely that the one higher in working memory capacity would have performed considerably better on the sight-reading task.

On the IQ front, the effect might be more definitive.

David Lubinski and Camilla Benbow ... and their colleagues tracked the educational and occupational accomplishments of more than 2,000 people who as part of a youth talent search scored in the top 1 percent on the SAT by the age of 13. (Scores on the SAT correlate so highly with I.Q. that the psychologist Howard Gardner described it as a “thinly disguised” intelligence test.) The remarkable finding of their study is that, compared with the participants who were “only” in the 99.1 percentile for intellectual ability at age 12, those who were in the 99.9 percentile — the profoundly gifted — were between three and five times more likely to go on to earn a doctorate, secure a patent, publish an article in a scientific journal or publish a literary work. A high level of intellectual ability gives you an enormous real-world advantage.

Saturday, November 19, 2011

I had cataract surgery on one eye the other day, and the results are a bit strange. If I take off my glasses, I have just fine distance vision through the relensed eye, but I can't see up close. If I leave my glasses on, I can see up close through the other eye, but get a mixture of the blurred image (through glasses and new lens) and my old glasses aided other eye.

Naturally I tried taking out the glass from the side with the new lens. Now I had two semi-sharp images, but they were rather drastically different in size. The difference in focal length between my spectacles and the inserted lens produces a dramatic difference in image size.
Too big, as the physician predicted, for my brain to merge them effectively.

Tuesday, November 15, 2011

Herman Cain did an interview in which he managed a spectacularly obtuse and incoherent response on Libya. Now it seems pretty apparent that the guy hasn't thought much about - well anything - but his resume suggests that he probably isn't as dumb as he sounds. The thing is, catering to the Republican electorate demands such logic defying leaps that it's pretty easy to wander into the no-man's land of utter vacuity.

Sunday, November 13, 2011

Now that The Big Bang Theory is in syndication, I've had an opportunity to look at the episodes with more of a critical eye. I continue to be really impressed with Jim Parsons acting skills. The only other regular who really seems to be able to hold the stage with him is Kaley Cuoco. Their occasional one-on-ones are the highlights of the series.

A friend of mine was having trouble remembering the numeric part of her license plate number, which happened to be 253. I pointed out that the number was the product of two two-digit primes, 11 and 23, and that the digits of the factors and the target number were all members of the Fibonacci series.

Oddly enough, she didn't find these too helpful, but chose to just remember that 2+3=5.

This is the way the world ends, multiple choice edition:
(a)Euro zone implodes, followed by massive banking collapse in France, Germany, etc., continental chaos and global depression.
(b)Israel attacks Iran, Middle East explodes, oil hits $300/barrel, followed by global depression.
(c)Bachman/Cain/Gingrich elected President, followed by US and global depression.
(d)Global warming produces widespread draught and flooding, followed by wars and economic collapse.
(e)Robots take over nearly all jobs, producing nearly universal employment and global economic collapse.
(f)Robots get tired of being run by idiot humans and assume power, disposing of excess (all?) humans.
(g)All or most of the above.

Tyler Cowen is a very erudite fellow who manages to twist himself into a very distorted picture of reality. His NYT column is worth reading, mainly as a case in point.

Nonetheless, as someone from a conservative and libertarian background, I find that I am hearing too much talk about riches and not enough about values. It’s worth recalling why so many Americans have respected the wealthy in the first place.

In nearly every age and every place the wealthy have attracted envy and all the other marks of respect, through fear and intimidation if not otherwise. Their control of culture tends to make them the heroes of their own stories. There is nothing uniqely American about this.

The United States has always had a culture with a high regard for those able to rise from poverty to riches. It has had a strong work ethic and entrepreneurial spirit and has attracted ambitious immigrants, many of whom were drawn here by the possibility of acquiring wealth. Furthermore, the best approach for fighting poverty is often precisely not to make fighting poverty the highest priority. Instead, it’s better to stress achievement and the pursuit of excellence, like a hero from an Ayn Rand novel. These are still at least the ideals of many conservatives and libertarians.

The hero must triumph over adversity, and those who rise to riches by ingenuity or criminality attract a lot of press. Mostly, though, ages of oligarchy are strongly resistant to the newly rich, and the US has often been unexceptional in this regard. I did upchuck a bit on the penultimate sentence, of course.

...the traditional, pro-wealth cultural vision has a great appeal for me...
...
The first problem is that higher status for the wealthy can easily lead to crony capitalism. In public discourse social status judgments are often crude. Critical differences are lost, like the distinction between earning money through production for consumers, as Apple has done, and earning money through the manipulation of government, which heavily subsidized agribusinesses have done.

Acquisition of great wealth is nearly always heavily abetted by governments. Apple's version is certainly less egregious than that of many, but a glance at the patent wars they have raged shows the hand of government is omnipresent.

The annoying thing about Tyler is that I can't dismiss him as an idiot - he does see big chunks of reality.

The second problem is that many conservatives have become so attached to their cultural vision that they have ceded sound, technocratic reasoning to the left and center. For instance there is a common willingness among conservatives to defend the Bush tax cuts, even though the evidence does not show much of an economic payoff.

But then he wanders into fantasy land:

The counterintuitive tragedy is this: modern conservative thought is relying increasingly on social engineering through economic policy, by hoping that a weaker social welfare state will somehow promote individual responsibility. Maybe it won’t. ..
...
Nonetheless, higher income inequality will increase the appeal of traditional mores — of discipline and hard work — because they bolster one’s chances of advancing economically. That means more people and especially more parents will yearn for a tough, pro-discipline and pro-wealth cultural revolution. And so they should.

Friday, November 11, 2011

A fairly wide range of economists of both the right and left have now pronounced the Euro dead and gone. Markets, however, still seem to be responding ecstatically to every new stopgap thrown up by the European establishment. Who will turn out to be right?

There is a common thread among the sex scandals of the Catholic Church, Penn State, and Herman Cain - those with power become heroes to some, and when they abuse that power, the hero worshippers rush to defend the indefensible. It's actually more complicated than that, I suppose.

Why did popes cover up the Church's scandals? Why did Paterno and the Penn State administrators cover up terrible crimes in which they had no direct part? Why do Herman Cain's supporters rush to throw money at him now that it's all but certain that he is finished?

An attempt to defend a legend that's already a lie? Denial so strong that it trumps every evidence of reality?

It's pretty clear that we humans indeed have powerful tools for fooling ourselves. Why it should be so is harder to explain.